3Q23 in line with expectations, 4Q23F guidance ahead
- 3Q23 adjusted EBITDA of US$1,092m (+19% q-o-q, +111% y-o-y) was 7% higher than consensus estimate and 6.5% higher than internal guidance on continuously improving both Delivery and Mobility segment margins.
- Revenue of US$9.2bn (+0% q-o-q, +11% y-o-y) in 3Q23 was slightly below consensus estimates by 3% due to the reclassification of certain incentive spends for Uber Eats. However, Gross Bookings, totaling US$35.2bn (+5% q-o-q, +21% y-o-y), were broadly in line with the street estimate.
- Adj.EBITDA guidance of US$1,180m-US$1,240m for 4Q23F, the mid-point guidance is 2.5% above the consensus estimate.
3Q23 adjusted EBITDA beat the street but revenue slightly missed. Adjusted EBITDA reached US$1,092m (+19% q-o-q, 112% y-o-y), approximately 8% above the street estimate, owing to continuously improving profitability in the Mobility adjusted EBITDA margin (25.4% in 3Q23, +145bps q-o-q) and Delivery adjusted EBITDA margin (32.1% in 3Q23, +397bps q-o-q). The adjusted EBITDA exceeded UBER’s higher-end guidance of US$1,025m. Overall adjusted EBITDA margin was at 11.8% in 3Q23, surpassing the street estimate of 10.7%. The increased volume of business led to improved cost efficiency, contributing to the rising adjusted EBITDA in the Mobility segment. Similarly, higher volumes coupled with higher advertising revenue, and lower marketing expenses were key factors driving the growth of adjusted EBITDA in the Delivery segment.
UBER posted revenue of US$9.2bn (flat +0% q-o-q, +12% y-o-y), slightly missing estimates by 3%. In 3Q23, the Mobility segment reported revenue of US$5,076m (+4% q-o-q, +31% y-o-y), while the Delivery segment reported revenue of US$2,935m (-4% q-o-q, +6% y-o-y). The management said that the revenue would have been 8% higher, but the company reclassified certain incentive spends for Uber Eats as contra revenue instead of marketing expenses this quarter. Overall gross booking in 3Q23 was at US$35.2bn (+5% q-o-q, +21% y-o-y) inline with the consensus estimate of US$35bn, with Mobility gross bookings growing to US$17.9bn (+7% q-o-q, +31% y-o-y) and Delivery gross bookings of US$16.0bn (+3.2% q-o-q, 18% y-o-y). During Q3, Uber expanded its Uber One program to 18 countries, increasing its member base to 15 million members. This growth has significantly driven Delivery adoption, with members contributing to more than 40% of Delivery Gross Bookings. Additionally, Uber’s advertising business is experiencing profitable growth, marked by a substantial increase in its advertiser base, expansion of Post-Checkout Ads on Uber Eats, and the introduction of in-car tablet advertising in various U.S. markets.
UBER guides 4Q23F adjusted EBITDA of US$1,180m-1,240m, with the midpoint guidance being 2.5% above street estimates. UBER guides 4Q23F Gross Bookings to grow at 3%-6% q-o-q into a range of US$36.5bn-US$37.5bn. Adjusted EBITDA guidance is expected to be in the range of US$1,180m-US$1,240m for 4Q23F, with the midpoint guidance being 2.5% above street estimates of US$1,181m.